Importance Of Investment In Infrastructure

Few would contradict the fact that the investment in infrastructure is important to the economy or an infrastructure in good working order is obviously a necessary condition for economic activity. According to Eberts (2002) , the essential question is whether, at the margin, an additional investment infrastructure contributes to economic growth. To policy makers, this Growth has several possible outcomes, including employment growth and income, improving the quality of life, environmental protection, or even, the sustainable development. This multidimensional approach to development Economic analysis requires infrastructure investment taking into account many factors. Eberts chose as example the investment in infrastructure transport. In the …show more content…
Investment: Does it improve productivity? Does it increase the value added tax (personal income)? Does it create new jobs? Does it improve the quality of the environment? Does it enhance the quality of life? Does it improve access of low-paid workers to jobs? Answering these questions raises a host of estimating technical difficulties, but also allows us to better understand how to properly assess the value economic investment, going beyond the technical estimates. In addition, Gordon (2002) suggests that investment in infrastructure can cause organizational changes and management that go beyond physical benefits of infrastructure. Thus, the construction of a network path iron led to the introduction of time zones and standardized schedules that provide economic …show more content…
The business case supports the assessment Project ROI . By cons, estimation functions gross production focuses on the contribution of various categories Investment in global production. These approaches have both advantages and disadvantages. In both cases, the first hurdle is to clarify the relationship between the specific characteristics of the infrastructure networks on the one hand, and production and results on the other. Essentially, this requires establishing relationship between the technical characteristics of the infrastructure investment and nature of regional growth. This is a complex relationship with the institution request the identification of infrastructure performance characteristics and estimating the economic and environmental effects of the investment. She also requires a measurement indirect effects. Finally, the Achilles tendon of these approaches is the need for accurate measurement of the capital stock. This measure pose, too, many technical problems because the depreciation and value economic variables that are difficult to determine. Since the public capital is rarely sold, the declared value is based on the cost at the time of installation, Net physical depreciation. The estimates of economic depreciation would useful, but they are not available. This gap means that public officials can assess the physical life of the infrastructure, but cannot determine